The ancient Greek physician Hippocrates once said: “
Healing is a matter of time, but it is sometimes also a matter of
opportunity
.”

So how can we seize this opportunity to get to
the heart of a stronger recovery—trying to turn a promising upswing
into lasting prosperity for all citizens in all
countries
?

This is the challenge we must take on.

Looking out upon the world’s finance ministers and central bank
governors—the officials who, in the midst of even the most trying
conditions, put their heads down and get on with the business of
keeping economies on track, finding money for key priorities, and
guarding against the next crisis—I am confident that we can advance on
this crucial task.

1. A Recovery Shared by All: Three Priorities

I see three priorities: get the economic fundamentals right; tackle
more decisively the issue of excessive inequality; and address the
major concerns of our young people to help ensure bright prospects for
them and for future generations.

(a) Focus on the economic fundamentals

First, the
economic fundamentals. In our increasingly interconnected world,
countries travel together, but on different paths and at different
speeds. Policies need to keep pace.

This means using a tailored mix of monetary, fiscal, and structural
policies to consolidate the recovery and raise growth prospects.

Managing a smooth normalization of monetary policy is critical; so are
fiscal strategies that reduce high debt without hurting growth and
confidence.

We must also guard against the build-up of financial vulnerabilities.

In addition, we need reforms that can lift productivity and potential
output. Our analysis of structural reforms over economic cycles shows
that labor and product market reforms are more potent during economic
upswings.

We must not miss this opportunity: it holds the promise of more growth,
more jobs, more income.

(b) Address excessive inequality head-on

Nor should we miss this opportunity to address more decisively—and more
directly—the issue which has so damaged our peoples and societies.

I am talking about excessive inequality. It
hinders growth, erodes trust, and fuels political tensions.

Despite reductions in poverty and inequality between countries
over the past generation, income and wealth inequality within
countries has been rising. Today the top 1 percent owns about half of
the world’s wealth.

How can we tackle this issue more head-on?

Investments in people are key: health, education, life-long
learning.

Stronger safety nets are key, including more direct support for people and communities struggling to adapt to
disruptions, whether from rapid technological change or other forces,
including trade.

Fiscal tools are also key. Our research shows, for example, that
some advanced economies could raise their top tax rates without slowing
growth, which would provide resources for priority needs or debt
reduction.

And, of course, we need to do more to realize the full potential of
half the global population—women. As I have said many times before,
this is an economic no-brainer.

So let us empower women by eliminating legal impediments and bias in
taxation—and by providing support for greater participation in the
labor market.

This would be a global game changer. It would increase growth, reduce
inequality, and support diversity.

Young girls as well as young boys will be a major influence on the
world’s future.

Which brings me to my third priority—what are young people’s main
concerns?

(c) Concerns of the young

According to the recent World Economic Forum youth survey, two issues
are at the top of the list: one is corruption; and another is
climate change.

Then there is the challenge of money laundering and terrorist financing
—a threat to every economy and a key priority for the IMF. In this
area, we have provided technical assistance to 120 countries.

Our analysis shows that moving from high to low perceived corruption
levels can increase public investment efficiency by 50 percent—and
raise real per capita income by nearly one percentage point.

That is why we have committed to step up our efforts in the fight
against corruption. And we will work with all our members in an
even-handed manner in this endeavor.

Climate change

The second major concern of young people is climate change.

While it affects everyone, the young and future generations clearly
have the most at stake. Just as we owe it to them to pass on a global
economy not plagued by debt, we also owe it to them to transfer a
planet not plagued by CO2 emissions.

We also know that low-income countries are disproportionately affected.
Our estimates suggest that a 1 degree Celsius increase in a country
with an average annual temperature of 25 degrees—such as Bangladesh,
Haiti, or Gabon—could reduce per capita GDP by nearly 1.5 percent.

Energy pricing is key, because trillions of dollars
[1]
are being spent on subsidies that drive carbon emissions. With energy
prices relatively low, we now have the opportunity to reduce and
eliminate these subsidies.

To get it right, we need to price it right.

2. International Cooperation and the IMF

Of course, we can only be successful in addressing global challenges if
we work together. A country can go it alone, but it will go further if
it goes together with other countries. So says an African proverb.

That is true for old and new challenges, ranging from natural
disasters, to trade restrictions, and cybercrime. Or think of our
shared responsibility to achieve the Sustainable Development Goals.

We know from experience that international cooperation works—
from reconstruction after World War II more than 70 years ago to
fighting Ebola just a few years back
.

The IMF is working in partnership with you, so that we can all
go far. How?

You have heard me talk about an IMF that strives to be more A
gile, Integrated, and Member-focused—the “AIM” objective.
Have we made progress?

Since we met last year, we provided support to 16 countries via lending programs for a total of more than US$27 billion,
including through the rapid credit facility. And we have moved quickly
to strengthen our surveillance, including new analysis on fintech and its impact on financial intermediation and monetary
policy.

We have become more integrated by combining our research and
multilateral perspective with country-specific policy advice. We are
also collaborating with other institutions on a broad array of issues.

Above all, we are focused on serving you, our members, in
new and better ways.

Over the past year, we conducted 127 country consultations, with
topical analysis on issues ranging from gender analysis in Rwanda, to
climate change resilience in Seychelles, and inclusion and tax reform
in the United States.

We have also provided more tailored technical assistance and knowledge
sharing. We have deployed to your countries thousands of missions, to
help raise public revenue more efficiently, monitor public spending in
a more cost-effective way, manage your debt, and regulate your
financial markets. We have helped train nearly 30,000 individuals
through free online economics courses.

And let me take this opportunity to thank profoundly the more than 40
member countries that have provided funding for our capacity
development efforts.

So yes, we have made progress, but we are not at a point where we can
stand still.

Going forward—among other things—we will offer technical assistance to
increase fiscal capacity, analyze the macroeconomic implications of
technology, and look at how we can better help low-income countries
deal with the burden of conflicts and natural disasters.

This is an IMF that is open to ideas. And signaling this, we have just
opened our new “iLab,” which I hope you will all have a chance to
visit!

Conclusion

Let me conclude:

Every day, in all corners of the world, I see our talented and diverse
staff—representing over 150 nationalities—come to work to give their
utmost in service to you, our members.

I see them supported by my exceptional colleagues on the management
team and by our steadfast Executive Board.

At the heart of our work is trust—the trust that you place in us as our members, and the trust that we
must have in each other to work collectively to solve pressing global
challenges. Earlier I expressed my confidence in you, and I can assure
you that we are working as hard as we can to deliver on your trust.

Together, we can strengthen the multilateral system that has
underpinned our world so well for more than seven decades.